Article I contributed to in RetailSpeak Magazine for the Summer issue:

http://www.onwindows.com/Portals/0/images/retailspeak-issue-24.pdf

There is a ton of buzz in the industry at the moment focused on enabling interaction between retailers and customers through the medium of a consumer’s mobile device.  While a fair amount of debate still rages with regard to exactly which types of interactions will be most compelling (some retailers have had some successes), many retailers and technology providers are attempting to develop technical standards for mobile device content/experience delivery in the meantime.

A growing number of small software providers have developed applications that seek to enable retailers to “integrate” their existing Web deployments to a version deployed on a mobile device.  These tend to focus on a re-factoring of the presentation layer, while adding another, separate application architecture (usually pretty thin) that seeks to deliver product and product detail pages in a manner that would be conducive to mobile Web browsing.  This type of approach is interesting in that it delivers a pretty compelling time-to-market.  Where it falls down potentially is in the ability to coordinate multi-channel strategies into a cohesive set of services delivered regardless of user interface.

As the mobile device channel matures however we will begin to see retailers and others seek to make mobile device content delivery part of mainstream technology strategy.  Instead of a separate application to support just the mobile Web experience we will see retailers develop “device intelligence”.  This capability will allow retailers to render content and experiences in a manner appropriate for the device, without sacrificing core integration and without creating yet another application environment that will need care and feeding.

Microsoft has taken a major step in the journey to support device intelligence with the Commerce Server 2009 Template Pack.  The Template Pack introduces a new “skin” that will support both standard desktop browsers as well as mobile devices (Windows Mobile and iPhone).  So instead of a completely separate application for mobile Microsoft is enabling a mobile skin on top of the standard Web deployment, that leverages the same services and capabilities of a Web experience. 

The Template Pack is available for download here:

http://go.microsoft.com/fwlink/?LinkId=147778

For many, the question posed in this post is not a question at all.  Many are fully bought in to the concept of eCommerce applications (or at a bare minimum, services) existing only is a SaaS delivery model.  To be clear, there are many ISVs that deliver enterprise-class services that surround retailers’ eCommerce applications.  Tax, payments, Web analytics, product imagery, A/B testing, customer support, etc all represent areas where ISVs are already delivering solutions in a SaaS delivery model. 

The question posed in this entry however is more complex.  There are eCommerce application vendors today that deliver their applications in a hosted model, basically allowing retailers to offload expensive infrastructure.  There are an even smaller number of ISVs that deliver what most approximates true SaaS,  The key differentiator is the ability to “customize” the application and “own” the application so-to-speak. 

Given the economics of Retail at the moment, there is more than a groundswell of support for any opportunity to buy an eCommerce solution without buying the infrastructure that is traditionally required to actually run it.  Furthering this movement is the reality that eCommerce buying decisions are now more than ever being driven by business constituencies inside of Retail organizations. Marketing and merchandising executives are much more willing to focus on rapidly-delivered features and capabilities at the expense of technical control and integration.

But can there be a compromise between the business and IT organizations inside of Retail?  Can marketing and merchandising executives get a highly functional application, complete with workflows and features that allow them to have a pseudo turnkey solution while at the same time providing IT with a scalable, standards-based platform that can be developed on top of, integrated to, and supported?  Perhaps. 

The answer may be a set of componentized, commerce-specific services in the cloud that allow for basic assembly and sequencing into a true application architecture. 

More on this topic to come…                  

“We have never seen an economy like this…”.  This has become the most repeated sentiment among retailers since the results from the most recent holiday season came in.  The culture of low expectations is officially pervasive.  In spite of the uncertainty and resultant tentative nature of technology planning many retailers have begun, there exists a set of core principles that are now guiding the leading retailers.  These retailers have looked upon the latest deceleration in consumer spending as an opportunity to grow market share and begin to position their infrastructure footprints for the inevitable return of consumer demand.      

In my view, real leaders in the retail industry are focused on the following:

1.  Connecting Consumer and Enterprise Technology Strategies

A clear convergence is occurring between consumer and enterprise technology.  At a bare minimum, retailers are finally beginning to think about systems investments with the customer at the center.  Part of this focus relates to point #3 below, but the key concept here is that alignment with consumer technology is top-line focused (i.e. more closely aligned with revenue), more intuitive for associates to learn, and can commonly take advantage of off-premise deployment options.

2.  Take Advantage of Easy Infrastructure Reduction Opportunities

Cloud-based software offerings, virtualization, thin-client deployments, etc, all represent quick-win, cost-reducing decisions. 

3.  Selling Systems Take Center Stage 

When it comes down to making investment decisions, if the spend does not directly impact selling systems it will be a tough sell to leadership.  POS, eCommerce, cross-channel experience, and digital advertising, are all areas that are hot as they impact top-line directly and tend to have quicker ROI.  Supply chain investments still matter but may be taken piecemeal more than they have been historically.   

For those of you ‘in the know’ on Twitter you can now follow Microsoft’s Retail Industry Team on Twitter.

http://twitter.com/msretail

As promised, some more information on Microsoft’s participation in the Retail Innovation Conference at the University of Arizona.  The following link provides a short video:

http://uanews.org/click/25017/1

I was fortunate enough to attend a summit hosted by the Terry J. Lundgren Center for Retailing and Consumer Sciences at the University of Arizona. The event focused on retail innovation by bringing together the students and faculty of the Lundgren Center along with some of the best and brightest of the retail industry’s brands and technology vendors.

I attend a number of events in the course of the year but would say that this event was memorable for a number of reasons. First, the inherent energy of a university atmosphere in the context of retail science and strategy is compelling. Retailing is about experiences and emotional connections made between customers, companies, and the brands and products they represent. The energy that students and dedicated faculty can bring to the concept of building connections between customers and retailers adds ‘fuel to the fire’ so to speak. Further, the future of retailing is inherently on display with young people. The ways in which they think about consumerism, their opportunities to impact the future of retail organizations, and the products and brands they will be compelled to connect with is very important for all of us to take note of.

Second, this event delivered a diverse cross-section of retailers. We heard interesting presentations from the standard bearers in the industry like Wal-Mart and Saks as well as innovative, young companies like Tom’s Shoes and TerraCycle. The confluence of perspectives (not as diverse as you might think) presented a comprehensive view of key retail challenges and strategies.

Some more thoughts to come in a future blog entry….

A wonderful summary of a new world in digital marketing.  This comes from:

“DigiMarketing: The Essential Guide to New Media & Digital Marketing”

I recently attended a break-out session at the National Retail Federation’s Annual Big Show in NYC.  In this session, Laura Wade-Gery, CEO of Tesco.com and Direct, spoke on Tesco’s strategy for cross-channel retailing success.  Not surprisingly, the discussion spent little time on technologies that enabled a connected enterprise execution for cross-channel retailing.  Instead she focused on how organizational alignment of Tesco’s traditional stores business with its eCommerce business was their primary tool for success. 

Early on in the growth of the the Web business, Tesco took a thoughtful approach to eCommerce that included incentivizing stores to participate actively in the success of the eCommerce business.  This included in some cases internal double-counting of revenue to ensure the stores would continue their focus on customer service even for Web-based orders.  Additionally, Tesco rightly re-used their competitive advantage in the supply chain and superior store infrastructure to fulfill Web orders directly in the aisles of Tesco stores. 

What is striking is that both of the ideas above are inherently logical when an organization considers the eCommerce business to be an important component of an overall strategy.  When retailers do this they tend to make decisions with the customer in mind rather than the expediency of internal politics or existing enterprise systems.   

With short-term ROI as the current call-to-action in Retail, eCommerce and customer experience teams have redeployed their budgets (and new funding requests) around projects that have the best chance of being approved.  As such, an emerging list of “likely-to-be-approved” site enhancement projects has risen to the top.  For clarity, when I refer to tactical site enhancements I am highlighting a focus on new features that can best be described as additive in nature.     

To be clear, these items can have a nominally positive impact on conversion rates.  Look for example at better SEO execution.  This is a  “level-the-playing field” type of initiative which can help lesser known brands compete with the biggest of the big.  Another safe bet is using customer analytics, A/B Testing, etc to simplify navigation.  Reducing ‘browse-to buy-clicks’ can make your site simpler to navigate and improve the shopping experience.  Another good example is leveraging site analytics to drive product recommendations (i.e. “Customers who bought this item also bought…” or “Welcome back John Doe, here are some recommended products…”.

The items above represent just a few of many examples of incremental site improvements which won’t break the bank, do support a short-term ROI, and don’t require fundamental technology upgrades.  In addition, they are even more enticing because there are matching 3rd party software solutions that can be purchased and deployed (typically as a service) in a minimally invasive way. 

Don’t lose sight of the big picture however.  While tactical upgrades can lead to some benefits, the longer, more strategic investments still deliver the strategic benefits.  Delivering coordinated strategies for product information management, Web merchandising, Web marketing, user experience design, integrated enterprise fulfillment, cross-channel experience, and more will transform eCommerce businesses into competitive advantages over the long term.

Retailers have been discussing, planning, testing, prototyping, piloting, and deploying mobile device engagement scenarios for consumers over the last 2-3 years.  While the levels of success retailers have had varies wildly, at the core of these efforts is the desire to engage consumers at a more intimate level.  The mobile device - the 1 foot screen - represents a compelling channel to not only engage consumers but also to provide a platform for retailers and other publishers to create and disseminate content. 

The interesting parallel here is in how traditional eCommerce organizations have realized the power and value in personalization.  Personalization as a strategy seeks to create a tailored, unique experience for a customer based on who they are, what they like and don't like, and how they like to shop.  "Good" personalization creates tangible business value (i.e. uptick in conversion rates) and a soft value in terms of brand affinity. 

The biggest struggle I have heard from retailers is not in the belief that there is value in personalizing a mobile device experience for customers.  The biggest struggle is in three areas:

1.  The use case(s)

What types of things will customers really want to "do" with their devices in the context of our brand or shopping experience?

2.  The "annoyance" factor

How can retailers offer mobile device experiences that are non-intrusive yet engaging, and that provide enough incentive for customers to engage while preserving trust between the retailer and the customer. 

3.  The technology

How do we do this?  How does this connect to other things we are doing in digital commerce?  How do we link a mobile device initiative with the rest of our strategy in areas like customer analytics, order management, content management, etc?

With TAG, Microsoft creates a platform to enable a multitude of compelling mobile use cases.  At its core TAG is a mobile marketing platform.  Microsoft TAG is inherently opt-in, as it encourages customers to seek out the information through both the download of the light application and the capture of the barcode itself.  For retailers, it provides a cloud-based infrastructure complete with analytics that can be used to gauge the value of the strategy.   

Check out this technology at:

http://www.microsoft.com/tag

Accenture, Avanade and Microsoft Announce Multi-Channel Retail Initiative

http://www.microsoft.com/presspass/press/2009/jan09/01-12MSAARetailersPR.mspx

Microsoft Puts Connected Experiences Center Stage at National Retail Federation Annual Convention & Expo

http://www.microsoft.com/Presspass/press/2009/jan09/01-08NRF09MA.mspx?rss_fdn=Press%20Releases

Attention Shoppers: Microsoft Opens Retail Experience Center

http://www.microsoft.com/presspass/press/2009/jan09/01-12RetailExperienceCenterOpeningPR.mspx

Microsoft Releases Windows Embedded POSReady 2009, Offering Retailers & Hospitality Organizations a Flexible and Connected Industry-Specific OS with Simplified Deployment

http://www.microsoft.com/presspass/press/2009/jan09/01-12WEPOSReady2009PR.mspx?rss_fdn=Press%20Releases

Microsoft Announces Commerce Server 2009

While many wondered "who" would actually show up to the National Retail Federation's Annual "Big Show" last week in New York City, I was much more interested in "why" people would be there.  I had little doubt that the traditional show attendees would find reasons to attend (some more social than business).  While attendance appeared to be down (at least visually) there was good participation in sessions, relatively steady Expo Hall traffic, and high quality retailer interest in a few key areas:

• Consumer Engagement Innovation
• Cross-channel commerce platforms
• Consumer mobile device engagement
• Solutions to Decrease Operational Spend
• Green (servers, POS devices, etc)
• Store Systems Device Management
• Operational Data Visibility
• Store KPIs
• Dashboard solutions

Meetings with retailers clearly indicated a renewed focus on investments that have clear ROI.  Most projects that have clear ROI still maintain executive support.  Smaller, focused teams from retail organizations were very interested in exploring their projects with vendor organizations.    

Microsoft's booth at NRF's Big Show will be a compelling mix of Consumer, Enterprise, and Store technology.  Connected Experiences for Retail is Microsoft's vision for the Retail Industry that demonstrates the business value Retailers can discover when they better connect consumers, people, systems, and information. 

Check out the following link for more information on our presence at the show:

http://www.microsoft.com/industry/retail/events/nrf.mspx

Looking forward to connecting at the event!

Retailers are working hard to pare down their investment priorities.  The mantra for retailers will be "business value".  Because most are expecting basically flat holiday growth at best, organizations are looking for ways to have top-line impact without negative bottom-line consequences.  eCommerce will likely be a bright spot for retailers in a tough holiday season.  As eCommerce will deliver some revenue growth for many retailers this holiday season, it will also be an area that will get some investment (or will get to stay on its original budget...).    

While there are different  paths to business value for eCommerce investments here are a few basic tenets to consider:

• Be realistic
• About revenue projections - 20-30% growth trajectories may not be realistic anymore.  Don't oversell where eCommerce revenue will go.  Be content to make it a bright spot. 
• About conversion rate impact - Buying keywords, revamping SEO strategies, etc are all great investments but at the end of the day conversion rate impact is the metric that matters.  Impacting conversion rate by a full point can be transformational for revenue, so don't set the bar too high.
• Keeping the lights on matters
• Operational efficiencies gained through new technologies or processes should be a priority, even when ROI is not immediate.
• Be careful with traditional shortcuts like adding hardware at peak volumes.  Is this the most efficient way to meet scale demands?  Think about working on bottlenecks with internal staff or a short-term project to reduce total hardware footprint.  Virtualization is hot clearly, so make sure your non-production servers (at a bare minimum) are taking advantage of this technology. 
• The Business Wins
• IT organizations that think of themselves like cost centers will be treated like cost centers.  eCommerce groups within IT are an integral component for overall success.
• Business organizations and IT organizations supporting eCommerce have melted together and approach projects jointly. 
• Marketers, merchandisers, content editors, etc are now expected to have both business and IT acumen.  By providing them easy to use, robust tools they can more effectively interact with customers, drive initiatives on they own, and make an impact.  The days of the change request are coming to an end.